Fears of Spanish bailout rise as bond yields top 6%. Spanish 10-year bond yields surged past 6% for the first time since December, and the first time since the ECB's two three-year liquidity operations, raising fears the country might need a bailout. EU officials are due to travel to Washington this week looking for a larger IMF war chest, although while Japan might offer $60B, the U.S. has until now insisted that the EU can use its own resources. SA author Robert Broens explains how Spain continues to affect global markets. (Sources: Kyodo, Bloomberg)
Exxon poised to succeed in Russia where BP failed. Exxon Mobil (XOM) and Rosneft are due to sign a wide-ranging strategic partnership at Vladimir Putin's residence today, Reuters reports. The firms will jointly search for oil in Russia's Arctic offshore, while Rosneft will gain access to Exxon's North American projects and its know-how.
Carlyle seeks up to $760M in $7B+ IPO. Private-equity firm Carlyle Group (CARL) will look to sell 30.5M shares for between $23 and $25 each in its IPO, creating a valuation of over $7B. That's largely in line with expectations, if on the conservative side amid other unsteady recent listings, such as that of Oaktree. (Source: WSJ)
Top Equities News
SA Interview: Shaping the case for Kinder Morgan. "With the largest natural gas system in the U.S.," Kinder Morgan (KMP) is in "a great position to take advantage" of the increased demand that will come from rock-bottom prices, company President C. Park Shaper told Seeking Alpha in an interview. SA author Simon Lack of SL Advisors, who took part in the interview, believes Kinder Morgan's plan to pay $5.19 to unit holders in 2012 makes its 6.3% forward yield look competitive and offers "the potential for a double digit total return."
Goldman cuts stake in ICBC in $2.3B deal. Goldman Sachs (GS) has sold 3.55B shares in Industrial & Commercial Bank of China to Temasek for $2.3B, taking Singapore’s sovereign wealth fund deeper into China's banking industry. Goldman, though, has no plans for another share sale in the near future, sources say. (Source: WSJ)
Credit Suisse may slash 5,000 jobs. Credit Suisse (CS) could reportedly announce it's cutting 5,000 positions at its investment bank when it reports Q1 results next week. Credit Suisse's I-bank, at nearly 21,000 bankers, is "simply completely oversized," sources say, and shareholders have been applying pressure to cut costs. (Source: Sonntag)
Falcone looks to Icahn as white knight. Hedge fund manager Phil Falcone hopes an equity investment from Carl Icahn could help save beleaguered Lightsquared. Icahn - one of the creditors who gave the wireless broadband start-up until the end of the month to turn around before putting it into technical default - was recently spotted breaking bread with Falcone in New York. (Source: Bloomberg)
Stratasys and Object to merge in $1.4B deal. Stratasys (SSYS) has agreed to merge with privately-held Object in an all-stock transaction with a total equity value of $1.4B. The combined 3D printer company plans to operate under the Stratasys name and have dual headquarters in Israel and Minnesota.
Page, Ellison set to testify as Google vs. Oracle begins. Jury selection in the trial over whether Google (GOOG) violated Oracle's (ORCL) Java patents is set to take place today. Oracle has somewhat scaled back its ambitions: having demanded $6.1B in damages for seven patents and copyright claims, it's now seeking $1B for two; Google says damages should be below $100M. Oracle CEO Larry Ellison and Google counterpart Larry Page are listed on Oracle's list of possible witnesses. (Source: Reuters)
ING sets auction in motion for Asia ops. ING (ING) has set a late-May deadline for suitors to submit first-round bids for its Asian life insurance business, which could bring in over $6.5B, Reuters reports.
Dutch want bankers to sign oath like doctors. The Dutch have come up with an interesting way to try to "restore the moral authority" of their financial sector: they're going to make bankers and insurers pledge an oath to put the interests of their clients first. The oath will come into force in January 2013, just after Goldman Sachs (GS) will apparently open an office in the country. (Source: Bloomberg)
Top Economic & Other News
Analysts unimpressed by wider yuan trading band. The yuan fell slightly against the dollar after China widened the renminbi's trading band to 1% from 0.5% - presumably not what the Treasury had in mind when it heard the news on Saturday. Currency analysts collectively yawned at Beijing's move, which, said strategist Marc Chandler, is "Machiavellian," as "China is giving up something that it is not really using." SA author Sammy Pollack explains how to short China with ETFs. (Source: MarketWatch)
Germany helps eurozone return to surplus. The eurozone swung to a trade surplus of €2.8B in February from a revised €7.9B deficit in January. The data is broadly in line with expectations. Eurozone trade was supported by continued strong exports from Germany. (Source: Eurostat)
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In Asia, Japan -1.7%. Hong Kong -0.4%. China -0.1%. India +0.3%.
In Europe, at midday, London -0.4%. Paris +1.0%. Frankfurt +0.7%.
Futures at 7:00: Dow +0.4%. S&P +0.35%. Nasdaq +0.3%. Crude -0.2% to $102.58. Gold -0.6% to $1650.40.
Monday's economic calendar:
8:30 Retail Sales
8:30 Empire State Mfg Survey
10:00 Business Inventories
10:00 NAHB Housing Market Index
3:30 PM Fed's Bullard: 'U.S. Economy and Monetary Policy'
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Companies that missed EPS expectations today include:
- Mattel (MAT) -